The Moderating Effect Of Regional Indpendence On The Effect Of Financing Policies, Capital Expenditure And Transfer Fund Towards The Performance Of Local Governments

Abstract

The performance of local governments is one of the measuring tools in assessing whether the government has carried out the mandate given by the community to manage their regions properly and measurably. This study purpose to determine the effect of financing policies, capital expenditures and transfer funds on the performance of local governments with regional independence as a moderating variable in the provincial government in Indonesia. This study uses a quantitative research model using secondary data. The data in this study were processed using the Moderating Regression Analysis (MRA) method supported by the IBM SPSS and Microsoft Excel programs as support software with data analysis techniques in the form of classical assumption tests as well as R2 test, F test, and t test. The population in this study are provinces that have consistently published annual local government financial reports during 2014-201. This study used purposive sampling technique and obtained samples of 33 provinces according to predetermined criteria. The results of this study indicate that the financing policy proxied by net revenue has no effect on local government performance, while capital expenditure and transfer funds have a significant negative effect on local government performance, regional independence strengthens the relationship between capital expenditure and transfer funds to local government performance, meanwhile regional independence does not have a moderating role between the relationship between financing policies and local government performance. This study uses data from provinces in Indonesia, it is suggested that further research should add district / city level local governments with an extended period of time